Correlation Between Hsi Malls and BTG Pactual

Can any of the company-specific risk be diversified away by investing in both Hsi Malls and BTG Pactual at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hsi Malls and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hsi Malls Fundo and BTG Pactual Logstica, you can compare the effects of market volatilities on Hsi Malls and BTG Pactual and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hsi Malls with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsi Malls and BTG Pactual.

Diversification Opportunities for Hsi Malls and BTG Pactual

0.74

Correlation Coefficient

Hsi Malls  BTG Pactual

Poor diversification

The 3 months correlation between Hsi and BTG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hsi Malls Fundo and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica and Hsi Malls is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hsi Malls Fundo are associated (or correlated) with BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of Hsi Malls i.e., Hsi Malls and BTG Pactual go up and down completely randomly.

Pair Corralation between Hsi Malls and BTG Pactual

Assuming the 90 days trading horizon Hsi Malls Fundo is expected to generate 1.48 times more return on investment than BTG Pactual. However, Hsi Malls is 1.48 times more volatile than BTG Pactual Logstica. It trades about 0.23 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.09 per unit of risk. If you would invest  7,166  in Hsi Malls Fundo on December 29, 2024 and sell it today you would earn a total of  1,153  from holding Hsi Malls Fundo or generate 16.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Hsi Malls Fundo  vs.  BTG Pactual Logstica

Hsi Malls Fundo

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hsi Malls Fundo are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak primary indicators, Hsi Malls sustained solid returns over the last few months and may actually be approaching a breakup point.

BTG Pactual Logstica

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BTG Pactual Logstica are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, BTG Pactual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hsi Malls and BTG Pactual

The main advantage of trading using opposite Hsi Malls and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsi Malls position performs unexpectedly, BTG Pactual can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BTG Pactual will offset losses from the drop in BTG Pactual's long position.

The idea behind Hsi Malls Fundo and BTG Pactual Logstica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.